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Wednesday, 14 October 2020

Kevin Rudd and the Global Financial Crisis

The Global Financial Crisis (GFC) that hit in 2008 was undoubtedly the biggest challenge for the leadership of then Prime Minister Kevin Rudd. Reacting to the fallout of investment banking collapse in the United States, Rudd needed to be quick to respond such that Australia did not share in the misfortune faced by Wall Street.

Rudd knew that the effects of the collapse of Lehman Brother’s would flow on to Australia, and he enacted a series of swift cabinet meetings. These meetings were held to come up with a plan to offset the damage that would be caused to the local Australian economy.

For many in those meetings, it was a rude awakening to discover just how interconnected global markets were in the sharing of the misfortune faced on Wall Street. Many felt that Australia was unfairly held hostage by the mistakes of investment bankers in the United States.

Kevin Rudd

While there many different proposed plans on how to proceed, the consensus was that Australia needed to be cut off from the problem before it could severally impact the local economy. Most importantly, the quick-acting on guaranteeing bank deposits and helping institutions in rising money was paramount in protecting Australia from the GFC fallout.

Australia was one of a minority of countries that avoid the recession (South Korea, Israel and Poland being the others). There was much debate about whether or not the Australian mining boom could have protected the country from the GFC without government intervention in the form of stimulus packages.

Many conservatives have predictably argued that the Rudd government spent too much money in bailing Australia out of the GFC. Ultimately, most Australians look on the period as one where Rudd and his government acted appropriately in order to keep Australians out of unemployment queues.

Finn Lymburner
Finn Lymburnerhttps://www.bulletinbite.com.au
Finn Lymburner is a senior journalist for The Bulletin Bite. Finn has worked at The Bulletin Bite since 2016, covering business affairs, money, state politics, local government and workplace relations for The Bulletin Bite.

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